In 1944, brothers Nesuhi and Ahmet Ertegun elected to remain in the USA when their mother and sister returned to Turkey, following the death of their father Munir Ertegun, who had been the first Turkish Ambassador to the United States. The brothers had become ardent fans of jazz and rhythm & blues music, amassing a collection of over 15,000 78rpm records.[5] Ahmet ostensibly stayed on in Washington to undertake post-graduate music studies at Georgetown University but immersed himself in the Washington music scene and decided to enter the record business, then enjoying a resurgence after wartime restrictions on the shellac used in manufacture.[6] He convinced the family dentist, Dr Vahdi Sabit, to invest $10,000 and recruited Herb Abramson, a dentistry student.

Atlantic Records was incorporated in October 1947 and was run by Abramson (the company president) and Ertegun (vice-president in charge of A&R, production and promotion) while Abramson's wife Miriam ran the label's publishing company, Progressive Music, and did most office duties until 1949 when Atlantic hired its first employee, book-keeper Francine Wakschal, who remained with the label for the next 49 years.[7] Miriam quickly gained a reputation for toughness: staff engineer Tom Dowd later recalled; "Tokyo Rose was the kindest name some people had for her"[8] and Doc Pomus described her as "an extraordinarily vitriolic woman".[9] When interviewed in 2009 she attributed her reputation to the company's chronic cash-flow shortage: " ... most of the problems we had with artists were that they wanted advances, and that was very difficult for us ... we were undercapitalized for a long time."[10] The label's original office in the Ritz Hotel, Manhattan proved too expensive so they relocated to an $85 per month room in the Hotel Jefferson.[11][12][13] In the early fifties Atlantic moved from the Hotel Jefferson to offices at 301 West 54th St and then to its best-known home at 356 West 56th St.

Atlantic's first batch of recordings were issued in late January 1948, and included Tiny Grimes' "That Old Black Magic" and "The Spider" by Joe Morris.[14] In its early years Atlantic focused principally on modern jazz[12][15] although it released some country and western and spoken word recordings. Abramson also produced "Magic Records" which were children's records with four different sets of grooves so each side had four different stories of which the story which got played was determined by where the stylus landed on the groove.[16]

Soon after its formation, Atlantic faced a serious challenge - in late 1947 James Petrillo, head of the American Federation of Musicians, announced an indefinite ban on all recording activities by union musicians, and this came into force on January 1, 1948. The union action forced Atlantic to use almost all its capital to cut and stockpile enough recordings to last through the ban, which was initially expected to continue for at least a year.[15]

In early 1949 a New Orleans distributor phoned Ertegun trying to obtain Stick McGhee's "Drinking Wine, Spo-Dee-O-Dee", which was unavailable due to the closure of McGhee's previous label. Ertegun knew Stick's younger brother Brownie McGhee, with whom Stick happened to be staying, so he contacted the McGhee brothers and cut a re-recording. When released in February 1949,[5] it became Atlantic's first hit, selling 400,000 copies, and ultimately reached #2 after spending almost half a year in the Billboard R&B charts - although McGhee himself earned just $10 for the session.[18] From this point Atlantic's fortunes rose rapidly: they recorded 187 songs in 1949 (more than three times the output of the previous two years) and received overtures of a manufacturing and distribution deal with Columbia Records, who would pay Atlantic a 3% royalty on every copy sold. Ertegun asked about artists' royalties, which he paid, which surprised Columbia executives, who did not, which scuttled the deal.[19]

On the recommendation of broadcaster Willis Conover, Ertegun and Abramson went to see Ruth Brown at the Crystal Caverns club in Washington and invited her to audition for Atlantic. She was badly injured in a car accident en route to New York but Atlantic supported her for nine months and then signed her. Her first release for the label "So Long", cut at her second Atlantic session on May 25, 1949 with the Eddie Condon band, was[20] a major hit, reaching #6 on the R&B chart. Brown went on to record more than eighty songs for the label, becoming the most prolific and best-selling Atlantic artist of the period. So significant was Brown's success to Atlantic's fortunes that the label became known colloquially as "The House That Ruth Built".[21]

Joe Morris, one of the label's earliest signings, scored a major hit with his October 1950 release "Anytime, Anyplace, Anywhere", the first Atlantic record issued in 45rpm format, which the company began pressing in January 1951. The Clovers' "Don't You Know I Love You" (composed by Ertegun) became the label's first R&B #1 in September 1951 and a few weeks later Ruth Brown's "Teardrops from my Eyes" became its first million-selling record.[22] She hit #1 again in March–April 1952 with "5-10-15 Hours".[5][20] "Daddy Daddy" reached #3 in September 1952, and "Mama, He Treats Your Daughter Mean" (which featured the MJQ's Connie Kay on drums) reached #1 in February–March 1953, becoming a solid seller for years afterwards,[20] as did the late 1954 "Oh What A Dream", her last hit with Atlantic. After she left the label in 1961 Brown's fortunes declined rapidly - within a few years was reduced to working as a cleaner and bus-driver to support her children. In the 1980s she sued her former label for unpaid royalties; although Atlantic, which had prided itself on treating artists fairly, had stopped paying royalties to some artists, Ahmet Ertegun denied this was intentional. Brown eventually received a voluntary payment of $20,000 and founded a charity, the Rhythm and Blues Foundation, in 1988, established with a donation of $1.5 million from Ertegun.[22]

Although not a major success in chart terms, female vocal trio The Cookies became an important part of the Atlantic 'family'. The original group, put together by Atlantic producer Jesse Stone in 1954, comprised Darlene (Ethel) McCrea, Dorothy Jones and Dorothy's cousin Beulah Robertson, who was replaced in 1956 by Marjorie "Margie" Hendricks. They recorded "In Paradise", a minor R&B hit in early 1956, but after another unsuccessful release the trio became the regular backing singers for Atlantic recording sessions. They performed on many hits in this period including Joe Turner's "Corinna, Corinna" and "Lipstick, Powder and Paint", Chuck Willis' "It's Too Late (She's Gone)", and Ray Charles' "Lonely Avenue", "Drown In My Own Tears" and "Night Time is the Right Time" (which features Margie Hendricks prominently), before being taken on by Ray Charles and renamed The Raelettes.

Recording engineer and producer Tom Dowd played a crucial role in Atlantic's success. He initially worked for Atlantic on a freelance basis, but within a few years he had been hired as the label's full-time staff engineer. His recordings for Atlantic and Stax exerted a major influence on the history of popular music and he scored more hits than George Martin and Phil Spector combined.[25][26] As Atlantic's studio engineer Tom Dowd oversaw many advances in production.

Atlantic was one of the first independent labels to make recordings in stereo: Dowd used a portable stereo recorder which ran simultaneously with the studio's existing mono recorder. In 1953 (according to Billboard) Atlantic was the first label to issue commercial LPs recorded in the early, experimental stereo system called binaural recording.[27] In this system, recordings were made using two microphones, spaced at approximately the distance between the human ears, and the left and right channels were cut as two separate, parallel grooves, although playing them back required a player with a special tone-arm fitted with dual needles; it was not until around 1958 that the single stylus microgroove system (in which the two stereo channels were cut into either side of a single groove) became the industry standard.[28] By the late 1950s stereo LPs and record players were being introduced into the marketplace. Atlantic's early stereo recordings included "Lover's Question" by Clyde McPhatter, "What Am I Living For" by Chuck Willis, "I Cried a Tear" by LaVern Baker, "Splish Splash" by Bobby Darin, "Yakety Yak" by the Coasters and "What'd I Say" by Ray Charles. Although these were primarily 45rpm mono singles for much of the 1950s Dowd stockpiled his "parallel" stereo takes for future release. In 1968 the label issued History of Rhythm and Blues, Volume 4 (Atlantic SD-8164) in stereo and the stereo versions of Ray Charles "What'd I Say" and "Night Time is the Right Time" were also included on the Atlantic anthology The Birth Of Soul: The Complete Atlantic Rhythm & Blues Recordings, 1952–1959.[29]

Atlantic's New York studio was also the first in America to install multitrack recording machines, developed by the Ampex company. Bobby Darin's "Splish, Splash" was the first song to be recorded on 8-track recorder whereas it was not until the mid-1960s that multitrackers became the norm in recording studios and EMI's Abbey Road Studios did not install 8-track facilities until 1968.[30]

The label entered the new LP market very early: its first was a 10" album of poetry by Walter Benton, This Is My Beloved (March 1949), narrated by John Dall, with music by Vernon Duke[31] In 1951, Atlantic was one of the first independents to press records in the new 45rpm single format, and by 1956 the "45" had overtaken the "78" as the main sales format for singles. In April that year, Miriam (Abramson) Bienstock reported to Billboard that Atlantic was now selling 75% of its singles as 45s whereas only one year earlier 78s had been outselling 45s by two to one.[32]

Herb Abramson was drafted into the US Army in February 1953 and left for Germany where he served in the US Army Dental Corps,[32] although he retained his post as President of Atlantic on full pay.[5] Ertegun recruited Billboard reporter Jerry Wexler in June 1953:[32] who is credited with coining the term "rhythm & blues" to replace the earlier "race music".[33] He was appointed vice-president and purchased 13% of the company's stock for $2,063.25.[5] Wexler and Ertegun soon formed a close partnership which, in collaboration with Tom Dowd, produced thirty R&B hits.

Ertegun and Wexler realized many R&B recordings by black artists were being covered by white performers, often with greater chart success:[34] Atlantic's LaVern Baker had a #4 R&B hit with "Tweedlee Dee" but a rival version by Georgia Gibbs went to #2 on the pop charts, Big Joe Turner's April 1954 release "Shake, Rattle and Roll" was a #1 R&B hit but only made #22 on the pop chart while Bill Haley & His Comets's version reached #7, sold over 1 million copies and was Decca Records' biggest-selling song of the year. In July 1954, as rock'n'roll gathered momentum, Wexler and Ertegun wrote a prescient article for Cash Box, headlined "The Latest Trend: R&B Disks Are Going Pop", devoted to what they called "cat music"; the same month, Atlantic scored its first major "crossover" hit on the Billboard pop chart when the "Sh-Boom" by The Clovers reached #5[32] (although The Crew-Cuts' version went to #1). Atlantic missed an important signing in 1955 when Sun Records' owner Sam Phillips sold Elvis Presley's recording contract in a bidding war between labels. Atlantic offered $25,000 which, Ertegun later noted, "was all the money we had then."[35] but they were outbid by RCA Records's offer of $45,000. In 1990 Ertegun remarked:

"The president of RCA at the time had been extensively quoted in Variety damning R&B music as immoral. He soon stopped when RCA signed Elvis Presley."[35]

Ahmet's older brother Nesuhi was recruited to the label in January 1955.[27] He had been living in Los Angeles for several years and had only irregular contact with his younger brother, but when Ahmet learned that Nesuhi had been offered a partnership in Atlantic's rival Imperial Records, he and Wexler convinced Nesuhi to join Atlantic instead.[36] Nesuhi headed the label's jazz division and built a strong roster, signing West Coast jazzers Shorty Rogers, Jimmy Giuffre, Herbie Mann and Les McCann, as well as[5]Charles Mingus, John Coltrane[37] and the Modern Jazz Quartet, who became a mainstay of the label, releasing twenty albums; by 1958 Atlantic was America's second-largest independent jazz label.[38] Nesuhi was also in charge of LP album production, a market that was beginning to take off, and he was credited with greatly improving the packaging, production and originality of Atlantic's LP line.[38] He soon deleted the old '100' and '400' series of 10" albums and the earlier 12" albums in Atlantic's catalog, launching the new '1200' series, which sold for $4.98, with Shorty Rogers' The Swingin' Mr Rogers (Atlantic 1212).[39] In 1956 he started the '8000' popular series (selling for $3.98) for the label's few R&B albums, reserving the 1200 series for jazz.[5]Joel Dorn became Nesuhi's assistant following his successful production of Hubert Laws' The Laws of Jazz.[40][41]

Herb Abramson's return from military service in 1955 created problems: Ertegun and Wexler had scored a run of hits, including Big Joe Turner's "Flip Flop and Fly" and Ray Charles' "I Got A Woman", and when Abramson returned, he realized that that he had been effectively replaced by Wexler as Ahmet's partner. There were also personal conflicts: Abramson did not get along well with either Wexler or Nesuhi Ertegun, and he had returned from his military service with a German girlfriend, which precipitated his divorce from Miriam, a minor stockholder and Atlantic's business and publishing manager.

By 1958 relations between Abramson and his partners had broken down completely, so in December 1958 a $300,000 buy-out was arranged; his stock was split between Nesuhi Ertegun and Abramson's ex-wife Miriam, who had in the meantime remarried to music publisher Freddy Bienstock (later the owner of the Carlin Music / Chappell Music publishing empire). Abramson's departure opened the way for Ahmet Ertegun to take over as president of the label.[42] The roles of the other executives with Abramson's departure were Wexler as executive vice-president and general manager, Neshui Ertegun as executive vice-president in charge of the LP department and Miriam Bienstock as vice-president and also president of Atlantic's music publishing arm Progressive Music with Wexler as executive vice-president and the Ertegun brothers vice-president of Progressive.[43]

Atlantic played a major role in popularizing the new genre that Jerry Wexler dubbed rhythm & blues and it profited handsomely from this. The market for these records exploded during late 1953 and early 1954, as more and more R&B hits crossed over to the mainstream (i.e. white) audience. In its tenth anniversary feature on Atlantic, Billboard noted that previously, "... a very big r&b record might achieve 250,000 sales, but from this point on (1953–54), the industry began to see million sellers, one after the other, in the r&b field".[27] It observed that the label's "fresh sound" and the quality of its recordings, arrangements and musicians was a great advance on what was the standard for R&B records at the time, and that for the past five years Atlantic had "dominated the rhythm and blues chart with its roster of powerhouse artists".[27]

From 1954 onwards Atlantic created or acquired several important subsidiary labels, the first being the short-lived but significant Cat Records. By the mid-1950s Atlantic had an informal agreement with Eddie Barclay's French label Barclay Records and the two companies regularly exchanged titles, usually jazz recordings. Atlantic also began to get recordings distributed in the United Kingdom; initially this was done through EMI on a 'one-off' basis, but in September 1955 Miriam Abramson went to the UK and signed a formal distribution deal with Decca Records, who were soon releasing every new Atlantic title.[44] Miriam later recalled:

"I was the one who came to England at the beginning to negotiate all those deals (in the fall of 1955). I would deal with people there who were not really comfortable with women in business, so ... we would do business very quickly and get it over with. But they were charming. Sir Edward Lewis was wonderful, we became great friends. We kept in touch after I left Atlantic."[45]

A new subsidiary label, Atco Records, was established in 1955 as an effort to keep Abramson involved. East West was founded in September 1957; it initially concentrated on singles and featured an "across the board" roster of pop, rock & roll, rhythm & blues and rockabilly artists[46] and its first releases were by Jay Holliday, Johnny Houston and The Glowtones. After a slow start, Atco had considerable success with The Coasters and Bobby Darin. Darin's early releases had not been successful and Abramson planned to drop him, but Ertegun offered him another chance, and the session he produced yielded "Splish Splash", which Darin had written in 12 minutes and which sold 100,000 copies in the first month and became a million-seller. During 1958-59 Darin's "Queen of the Hop" made the Top 10 on both the US pop and R&B charts and also charted in the UK, "Dream Lover", a multi-million seller, reached #2 in the USA and became a UK #1, and "Mack the Knife" (August 1959) went to #1 in both the US and the UK, sold over 2 million copies and won the 1960 Grammy Award for 'Record of the Year'. "Beyond the Sea", an English-language version of the Charles Trenet hit "La Mer", became his fourth consecutive US/UK Top 10 hit. Darin later signed with Capitol Records and left for Hollywood to begin a movie career although Atco continued to score hits into 1962 with tracks already in the can, including "You Must Have Been a Beautiful Baby" and "Things". Darin returned to Atlantic in 1965.[47]

By 1958 the label had expanded considerably - in 1956 Atlantic's head office moved to 157 West 57th St, while retaining two floors in the earlier premises at 234 West 56th St. New staff hired between 1956 and 1958 included Gary Kramer (director of publicity and advertising), Lester Lees (national sales manager), Victor Selsman (DJ promotions), Lester Sill (West Coast promotions) and Bob Bushnell (recording engineer).

Classic Atlantic logo used on singles; made the official logo in 2004 until 2015.

In October 1955 Jerry Leiber and Mike Stoller scored a West Coast hit with Los Angeles-based vocal group The Robins, who released "Smokey Joe's Cafe" on the duo's own Spark Records label. Seeking a national outlet, they leased the master to Atco and in November Atlantic purchased Spark and its catalog; Leiber and Stoller signed a landmark deal with Atlantic that made them America's first independent record producers. In 1956 two members of The Robins, Carl Gardner and Bobby Nunn, formed The Coasters who finally provided Atlantic with the crossover success it had been striving for. Their first (March 1956) Atco release (recorded in Hollywood) was "Down in Mexico", a Top 10 R&B hit: the double-sided "Young Blood"/"Searchin'" (also recorded in Hollywood) followed, with both sides entering the pop Top 10 after radio exposure and both charting for over 20 weeks - "Searchin'" reached #3 and "Young Blood" #8. Following Leiber and Stoller to New York, The Coasters' then cut "Yakety Yak" (June 1958), featuring the saxophone of King Curtis, and this became Atlantic's first pop #1; "Charlie Brown" made #2 on both the pop and R&B charts in February 1959, "Along Came Jones" also reached the pop Top 10 as did "Poison Ivy" (#7, Aug. 1959). "Little Egypt" (1961) was their last hit, reaching #21 in the pop chart.

Leiber and Stoller also wrote the classic "Ruby Baby" for The Drifters, a 1956 #13 R&B hit that featured Johnny Moore as lead vocalist (replacing Clyde McPhatter, who had been drafted); it became a pop standard and reached #2 in 1962 when re-recorded by Dion. By 1958, The Drifters had undergone many lineup changes and their former popularity was waning. That May, after one of the members got into a fight with the manager of the Apollo Theater, group manager George Treadwell sacked the entire lineup and recruited the members of The Five Crowns to become the 'new' Drifters. Leiber and Stoller produced "There Goes My Baby" with this second incarnation, featuring a lead vocal by Ben E. King, who also co-wrote the song. It was the first R&B song to feature a string arrangement, but Ertegun disliked it and Jerry Wexler was appalled, reportedly telling the producers; "Get that out of here. I hate it. It's out of tune and it's phony and it's shit and get it out of here".[48] They refused to release it for several months, but when they finally relented and released it as a single in April 1959, the song shot to #1.[29]

Phil Spector had learned the basics of record production working for Lester Sill and Lee Hazlewood's Trey Records label (which was distributed by Atlantic) in California in the late 1950s. At Sill's recommendation, he returned to New York to work for Leiber and Stoller in early 1960. Leiber and Stoller assigned him to produce Ray Peterson's "Corrine, Corrina" and Curtis Lee's "Pretty Little Angel Eyes" (released on Peterson's Dunes Records label), both of which became hits. As a result, Atlantic signed him as a staff producer, though his difficult personality was already evident, and Ahmet Ertegun was reportedly the only Atlantic executive who liked him. Leiber later remarked, "He wasn't likeable. He was funny, he was amusing - but he wasn't nice." Wexler reportedly had no time for him and Miriam Bienstock, in her typically blunt fashion, described Spector's erratic behavior "insane" and considered him "a pain in the neck".[49] When Ertegun took Spector to meet Bobby Darin, he openly criticized Darin's songwriting, with the result that Darin had him thrown out of the house.[50]

Despite these issues, Atlantic kept Spector on for a time, but with diminishing returns. Spector produced The Top Notes' original version of "Twist and Shout", but it flopped. Bert Berns, the song's writer, was incensed by Spector's arrangement, which he believed had ruined the song, so Berns re-recorded it the way he thought it should sound with The Isley Brothers, and it became a huge hit. Spector also produced Jean DuShon, Billy Storm, LaVern Baker and Ruth Brown during his short stay at Atlantic, with only moderate success. He left Atlantic in 1961 and returned to Los Angeles, where he founded Philles Records with Lester Sill and soon established himself as the preeminent American pop producer of the mid-1960s[51]

In early 1960 the Drifters came out with "Dance With Me", which reached #15 on the pop chart and #2 R&B. "This Magic Moment" reached #16 on the pop chart, and their classic rendition of Doc Pomus' poignant "Save The Last Dance For Me" became a major international pop hit, reaching #1 in the USA and #2 in the UK. However, in May 1960, after only one year and just 10 recordings with the Drifters, lead singer Benjamin Nelson left the group due to a dispute with manager George Treadwell. Assuming the stage name Ben E. King, he launched a successful solo career, although the Drifters went on to score several more big hits.

King's first solo single, "Spanish Harlem" (co-written by Leiber and Spector and produced by Leiber and Stoller), became a Top 10 pop hit in early 1961. It was followed by "Stand By Me", a re-interpretation of the gospel standard "Lord, Stand By Me", with new lyrics by King and orchestration by Stan Applebaum. Reaching #4 on the pop chart, the song quickly became a standard covered by many artists including John Lennon. It has since been included in the Rock and Roll Hall of Fame's 500 Songs That Shaped Rock and Roll listing and in 2001 it was voted #25 in the 'Songs of the Century' poll conducted by the Recording Industry Association of America. In late 1962, The Drifters returned to the charts, fronted by new lead vocalist Rudy Lewis, performing hits recorded with Ben E. King on stage and TV. "Up On The Roof", co-written by Gerry Goffin and Carole King, was another major crossover hit making the Top 5 on both the pop and R&B charts, and Mann, Weil, Leiber, and Stoller's "On Broadway" made the Top 10 on both charts. It has since been covered by many artists. The Drifters' last hit, "Under The Boardwalk" (1964), was produced by Bert Berns and orchestrated by British arranger-producer-composer Mike Leander. Lead singer Rudy Lewis was found dead on the morning of the recording session (May 21, 1964) and former lead singer Johnny Moore was brought in to replace him. Despite this tragedy, the song became a big hit, reaching #4 on the pop chart and #1 on the R&B chart, and went on to be covered by many other acts, including The Rolling Stones.

The Leiber & Stoller/Atlantic partnership was enormously successful, but by 1962 the relationship was deteriorating. The duo reportedly resented the credit accorded to Spector, but their own artistic and financial demands alienated the Atlantic executives. From the beginning, Miriam Bienstock "couldn't see why it was necessary to use them" and they infuriated Jerry Wexler by asking for producers' credits on record labels and sleeves, although this was grudgingly granted. The breaking point came when duo asked for a producer's royalty, which was also granted informally, but their accountant insisted on a written contract and also requested an audit of Atlantic's accounts. When this was carried out (over Jerry Wexler's strenuous objections) it was found that Leiber and Stoller had been underpaid by $18,000. Although Leiber considered dropping the matter, Stoller insisted on pressing Atlantic for payment, but when they presented their request, Wexler exploded, telling them it would mean the end of their relationship with Atlantic. Leiber and Stoller backed down but the showdown ended the partnership anyway: Ertegun and Wexler told them they would not be involved in The Drifters' next recording, giving the assignment to Phil Spector.[52] Atlantic quickly filled the gap left by Leiber and Stoller's departure with the hiring of producer and songwriter Bert Berns, who had recently scored a major hit with his remake of "Twist and Shout" for The Isley Brothers.

The ramifications of the split continued after Leiber and Stoller left Atlantic: in 1963 they set up Red Bird Records with George Goldner. Although they scored major hits (including The Dixie Cups' "Chapel of Love" and The Shangri-Las "Leader of the Pack"), the label's business position was precarious, so in late 1964 they approached Jerry Wexler, proposing a merger with Atlantic. When interviewed in 1990 for Ertegun's biography, Wexler declined to discuss the matter, but Ertegun himself claimed that these negotiations soon developed into a plan to buy him out. At this time (September 1964), the Ertegun brothers and Wexler were in the process of buying out the company's other two shareholders, Dr. Sabit and Miriam Bienstock[53] and it was proposed (presumably by Wexler) that Leiber and Stoller would buy Sabit's shares. Leiber, Stoller, Goldner, and Wexler pitched their plan to Ertegun at a fateful lunch meeting at the Plaza Hotel in New York. Though Leiber and Stoller were adamant it was not their intention to buy Ertegun out, Ahmet was aggravated by Goldner's high-handed attitude and became convinced that Wexler was conspiring with them. Wexler then told Ertegun that if he refused, Wexler would do the deal without him, but this was impossible since the Ertegun brothers still held the majority share, while Wexler only controlled about 20%. Ertegun nursed a lifelong grudge against Leiber and Stoller and the affair drove an irreparable wedge between Ertegun and Wexler.[54]

Atlantic was doing so well in early 1959 that some scheduled releases were held back and the company enjoyed two successive months of gross sales of over $1 million that summer, thanks to hits by The Coasters, The Drifters, LaVern Baker, Ray Charles, Bobby Darin and Clyde McPhatter[55] However, only months later the company was reeling from the successive loss of its two biggest artists, Bobby Darin and Ray Charles, who together accounted for one third of sales. Darin, who moved to the Los Angeles area, signed with Capitol Records. Charles signed a deal with ABC-Paramount Records in November 1959 that reportedly included increased royalties, a production deal, profit-sharing and eventual ownership of his master tapes. Wexler later commented; "It was very grim. I thought we were going to die" and Ertegun in 1990 disputed whether Charles had received the promised benefits. It led to a permanent rift between Charles and his former colleagues, although Ertegun remained good friends with Darin who returned to Atlantic in 1966.[56] Charles returned to Atlantic in 1977.[57]

Through 1961-62 Leiber and Stoller's successes maintained the label's fortunes, and these were further enhanced by a licensing deal with a small Memphis-based independent label Stax Records, which would soon prove to be of enormous value. In 1960, Atlantic's Memphis distributor Buster Williams contacted Wexler and told him he was pressing large quantities of "Cause I Love You", a duet between Memphis-based singers Carla Thomas and her father Rufus Thomas, which was released on a small local label called Satellite (which was soon renamed Stax Records, from the names of the owners, Jim Stewart and Estelle Axton, in 1961). Wexler contacted the co-owner of Satellite, Jim Stewart, who agreed to lease the record to Atlantic for $1000 plus a small royalty (the first money the label had ever made).[58] The deal included a $5000 payment against a five-year option on all other records. When Carla Thomas' first solo single, "Gee Whiz (Look at his Eyes)" began to attract national attention in 1961 New York producer Hy Weiss, went to Memphis to try to acquire the rights, but after examining the contract he told Wexler it gave Atlantic options on all Satellite recordings for the next five years. Wexler subsequently claimed he had been unaware of this: "The lawyers did it and I didn't read every contract."[59] Wexler and Stewart and discussed the deal and according to Wexler's account, "... there was no acrimony. Everything was fine and we picked up the record. Then we really rolled with Stax."[59]

The Atlantic deal marked the start of a hugely successful eight-year association between the two labels, giving Stax access to Atlantic's promotions and distribution, and it meant easy money for Atlantic, as Wexler later conceded:

"...it was certainly biased on our favor. We didn't pay for the masters ... Jim paid for the masters and then he would send us a finished tape and we would put it out. Our costs began at the production level - the pressing, and distribution, and promotion, and advertising."[60]

The deal to distribute Satellite's "Last Night" by The Mar-Keys on the Satellite label marked the first time Atlantic began marketing outside tracks on a non-Atlantic label.[61] When Stewart discovered there was another label in California called Satellite Records, he changed the name of his label to Stax.

Atlantic began pressing and distributing Stax records and Wexler soon sent Tom Dowd to upgrade Stax's recording equipment and facilities. Wexler was impressed by the easy-going, cooperative atmosphere at the Stax studios and by the distinctive sound of the label's racially integrated group of 'house' musicians (which he described as "an unthinkably great band")[62] and he was soon bringing Atlantic artists to Memphis to record.[29] Shortly afterwards Stewart and Wexler hired Al Bell, then working as a DJ at a Washington DC radio station, to take over national promotion of Stax releases, the first African-American partner in the label.[60]

In 1962 the Stax deal began to reap major rewards for both labels. An after-hours jam by members of the Stax house band resulted in the classic instrumental "Green Onions". In conversation with BBC Radio 2 DJ Johnnie Walker on September 7, 2008, guitarist Steve Cropper revealed that the record became an instant success when DJ Reuben Washington played it four times in succession on Memphis radio station WLOK, before either the tune or the band had an agreed-upon name. The single was issued nationally in August 1962, by which time the band had been dubbed Booker T & the MGs; "Green Onions" became the biggest instrumental hit of the year, reaching #1 on the R&B chart and #3 on the pop chart, where it stayed for 16 weeks, and it sold over one million copies, earning a gold record award.

1962 also saw the Stax debut of Otis Redding, who had been Johnny Jenkins' driver and was allowed to record several songs at the end of one of Jenkins' sessions, among them his own "These Arms of Mine", which was released on Stax's Volt subsidiary and became a minor hit in the south. Over the next five years Redding would become one of Stax's most important artists. During 1965 Redding broke through into the national charts; "Mr. Pitiful" reached #10 on the soul chart and just missed out on the pop Top 40, followed by "I've Been Loving You Too Long", which made #2 on the soul chart and peaked at #21. "Respect" also performed strongly, reaching #4 on the soul chart and #35 on the pop chart.[63]

Some of Pickett's earlier hits were recorded at Stax, but in early 1966 Jim Stewart banned all non-Stax productions from the studio, so Atlantic began using other southern studios, notably Rick Hall's FAME Studios in Muscle Shoals, Alabama, and the American Group Productions studio in Memphis, run by former Stax producer Chips Moman.

In late 1961 singer Solomon Burke arrived at Jerry Wexler's office unannounced. Wexler was a fan of Burke's and had long wanted to sign him so when Burke told Wexler his contract with his former label had expired Wexler replied: "You're home. I'm signing you today". The first song Wexler produced with Burke was "Just Out of Reach", which became a big hit in September 1961. Burke's the soul/country & western crossover predated Ray Charles' similar venture by more than 6 months. Burke became a consistent big seller through the mid-1960s and scored hits on Atlantic into 1968. In 1962 folk music was booming and the label came very close to signing Peter, Paul & Mary; although Wexler and Ertegun pursued them vigorously the deal fell through at the last minute and they later discovered music publisher Artie Mogull had introduced their manager Albert Grossman to Warner Bros. Records executive Herman Starr, who had made the trio an irresistible offer that gave them complete creative control over the recording and packaging of their music.[64]

Doris Troy signed with Atlantic in early 1963 and in June scored a major hit with "Just One Look", which she co-wrote and which reached #3 on the R&B chart and #10 on the pop chart. She scored another UK hit with "What'cha Gonna Do About It" and went on to a long and a successful career as a backing vocalist on many Dusty Springfield hits and with other famous acts including Pink Floyd, George Harrison and Nick Drake. "Just One Look" has been covered by many other artists including The Hollies, whose version became a major hit in the UK and gave the group its first US chart placing in 1964.

1967-68 was a peak period for Atlantic, as the string of hits coming from the Stax roster was augmented by the tremendous crossover success of Aretha Franklin, who shot to fame virtually overnight, becoming the preeminent female soul artist of the era, and earning the title "Queen of Soul". Wexler signed Franklin in January 1967 after the expiry of her contract with Columbia Records, who had unsuccessfully tried to market her as a jazz singer. In late 1966 a Columbia executive asked Jerry Wexler what he was going to do with Franklin, to which he replied "we're gonna put her back in church".[63] Wexler was determined to return Franklin to her gospel roots and personally took over her production at FAME Studios in Muscle Shoals, crucially allowing her to establish the "feel" of the songs by singing while accompanying herself on piano. Although the session was fraught with tension (mainly due to the fractious presence of Aretha's then husband and manager, Ted White), it yielded a double-sided hit which initiated a run of seven consecutive singles that made both the US pop and soul Top 10, and of which five were million-sellers; "I Never Loved A Man (The Way I Love You)" (b/w "Do Right Woman") (soul #1, pop #9), "Respect" (soul and pop #1), "Baby, I Love You" (soul #1, pop #4), "(You Make Me Feel Like) A Natural Woman" (soul #2, pop #8), "Chain of Fools" (soul #1, pop #2), "Since You've Been Gone" (1968, soul #1, pop #5) and "Think" (1968, soul #1, pop #7).

The mid-1960s British Invasion led Atlantic to change its British distributor, since Decca did not give Atlantic access to its British recording artists, who mainly appeared in the U.S. via their U.S. subsidiary London Records. In 1966 Atlantic signed a new reciprocal licensing deal with Polydor Records. Thanks to Polydor's recent distribution deal with Robert Stigwood's Reaction label, the deal included newly formed British "supergroup" Cream, whose debut album was released on Atco in late 1966. In May 1967 the group came to Atlantic's New York studio to record their US breakthrough LP Disraeli Gears with Tom Dowd; it became a Top 5 LP in both the US and the UK, with the single "Sunshine of Your Love" reaching #5 on the Billboard Hot 100. Although Jerry Wexler was dismissive of the new developments in popular music—derisively dubbing the new generation of (predominantly white) musicians as "the rockoids"[65]—Cream's American success marked the beginning of Atlantic's hugely successful diversification into the exploding rock music market, which would reap enormous rewards in the 1970s with signings such as Led Zeppelin, Yes, Crosby, Stills, Nash & Young and Bad Company.

In late 1966 rising Los Angeles group Buffalo Springfield were signed to the Atco label, and in early 1967 they scored a major US hit with their second single, "For What It's Worth", which made the national Top 10, sold over 1 million copies and earned a gold record award. Despite this early breakthrough and Ahmet Ertegun's high hopes for the band, internal tensions and the drug-related deportation of Canadian-born bassist Bruce Palmer led to the band splitting up in May 1968 without achieving any further hits. However former members Stephen Stills and Neil Young would go on to play a major role in Atlantic's rock success as members of 1970s supergroup Crosby, Stills, Nash & Young.

In 1965 Jerry Wexler signed Los Angeles duo Sonny & Cher to Atco and their first single for the label became an international smash hit; "I Got You Babe" spent three weeks at #1 on the Billboard Hot 100 and sold more than million copies in the USA, as well as reaching #1 in the UK, where it sold 780,000 copies. Over the next three years the duo scored a string of hits, with a total of five Top 20 US singles including the #6 hit "The Beat Goes On" (1967), and their debut album Look At Us reached #2 on the US album chart in 1965.

Despite the huge success Atlantic was enjoying with its own artists and through its deal with Stax, by 1967 Jerry Wexler was seriously concerned about the disintegration of the old order of independent record companies and, fearing for the label's future, he began agitating for it to be sold to a larger company. Label president Ahmet Ertegun still had no desire to sell, but the balance of power had changed since the abortive takeover attempt of 1962; Atlantic's original investor Dr Vahdi Sabit and minority stockholder Miriam Bienstock had both been bought out in September 1964[53] and the other remaining partner, Nesuhi Ertegun, was eventually convinced to side with Wexler. Since they jointly held more stock, Ahmet was obliged to agree to the sale.

In October 1967 Atlantic was sold to Warner Bros.-Seven Arts for US$17.5 million, although all the partners later agreed that it was a poor deal which greatly undervalued Atlantic's true worth. Initially, Atlantic and Atco operated entirely separately from WB-SA's other labels, Warner Bros. and Reprise Records, and WB-SA's management did not interfere with the music division, since the ailing movie division was losing money, while the Warner recording division was booming - by mid-1968 Warner's recording and publishing interests were generating 74% of the group's total profits.[66][67][68]

The sale of Atlantic Records activated a clause in the distribution agreement with Stax Records calling for renegotiation of the distribution deal and at this point the Stax partners discovered that the deal gave Atlantic ownership of all the Stax recordings Atlantic distributed. The new Warner owners refused to relinquish ownership of the Stax masters, so the distribution deal ended on May 1968.[69] Atlantic continues to hold the rights to Stax recordings they distributed in the 1960s.

In the wake of the takeover, Jerry Wexler's influence in the company rapidly diminished; by his own admission, he and Ertegun had run Atlantic as "utmost despots" but in the new corporate structure, he found himself unwilling to accept the delegation of responsibility that his executive role dictated. He was also alienated from the "rockoid" white acts that were quickly becoming the label's most profitable commodities, and dispirited by the rapidly waning fortunes of the black acts he had championed, such as Ben E. King and Solomon Burke. Wexler ultimately decided to leave New York and move to Florida. Following his departure, Ertegun—who had previously taken little interest in Atlantic's business affairs—took decisive control of the label[70] and quickly became a major force in the expanding Warner music group.

In 1969 Warner Bros.-Seven Arts was taken over by the Kinney National Company, and in the early 1970s the group was rebadged as Warner Communications. After buying Elektra Records and its sister label Nonesuch Records in 1970, Kinney combined the operations of all of its record labels under a new holding company, Warner-Elektra-Atlantic, or WEA for short, and also known as Warner Music Group. WEA was also used as a label for distributing the company's artists outside North America. In January 1970, Ahmet Ertegun was successful in his executive battle against Warner Bros. Records president Mike Maitland to keep Atlantic Records autonomous and as a result Maitland was fired by Kinney president Steve Ross. Ertegun recommended Mo Ostin to succeed Maitland as Warner Bros. Records president.[74] With Ertegun's power at Warners now secure, Atlantic was able to successfully maintain autonomy through the parent company reorganizations and continue to do their own marketing, while WEA handled distribution.

Over the course of the 1970s, Atlantic - until then regarded as the pre-eminent American R&B/soul label - rapidly reinvented itself as a major force on the burgeoning rock music scene and, thanks to a string of lucrative signings, the Atlantic roster soon boasted some of the most popular and successful rock acts in the world. Ahmet Ertegun unquestionably led this change, but much credit should also be accorded to label executive Jerry L. Greenberg and A&R manager John Kalodner, both of whom came to prominence at Atlantic in this period.

It is notable that many of the biggest rock acts on the Atlantic roster in this period were British (including Led Zeppelin, Genesis, Yes, Bad Company and Phil Collins) and this was largely due to the influence of Ahmet Ertegun. According to Greenberg, Ertegun had long seen the UK as a prime source of untapped musical talent and at his urging, Greenberg was soon visiting the UK six or seven times each year in search of new signings.[75]

For much of its early history, Jerry Wexler had effectively been the "day-to-day" manager of the label,[76] while Ertegun had concentrated in A&R and had shown comparatively less interest in the business side of the operation - but that changed rapidly after the sale to Warner. Although Ertegun had been forced into accepting the sale, he adroitly turned the situation to his advantage - he quickly gained executive control of the label, and was also soon wielding considerable influence in the larger Warner group. By contrast, Wexler was disenchanted by Atlantic's move into "white rock"; during the early 1970s he gradually drifted away from the label, and he officially left the company in 1975. It was Wexler's protégé Jerry L. Greenberg who filled the breach left by his departure, and alongside Ertegun, Greenberg played a major role in Atlantic 's success in the 1970s.

Greenberg's meteoric rise to prominence at Atlantic saw him go from personal assistant to label president in just seven years. As a teenager, he drummed for his own group, Jerry Green and The Passengers, which recorded for several labels (including Atlantic) in the late 1950s, and by eighteen he had founded his own independent label. He began his professional career in the music industry in the early 1960s as a "plugger", promoting newly released records to radio stations. In 1967, on the strength of Greenberg's success in promoting Percy Sledge's hit "When a Man Loves a Woman", Wexler hired Greenberg as his personal assistant, and over the next few years he mentored Greenberg in recording, producing, finding songs, and the day-to-day tasks of running a major label.

Greenberg: "When I came to work for him (Wexler) one of the first assignments he gave me was to find songs for Dusty Springfield for the Dusty in Memphis album. Jerry taught me the day-to-day aspects of the record business, which was finding songs, how to call disc jockeys, how to check sales, marketing ... all of that. When they sold the company (to Warner) Jerry went to Florida and started making records down there and that’s when I really became close with Ahmet. When Ahmet signed The Rolling Stones in 1971 he took me to France to meet Mick Jagger. That’s when I really became Ahmet’s protégé. I learned from Ahmet, first of all, about music and, secondly, how you treat artist and the whole creative system that goes with treating an artist. The Rolling Stones didn’t turn out a record every two years. They put one out when creatively they were ready to write songs. I was a musician and all of our artists recognized that and I think that is why I got along with them so well. I was never intimidated by Robert Plant or Belushi or the Bee Gees or the Eagles. I told them what I thought about the record. I told them if I thought they had a hit single or not. In case of a tie the artist won. It was that simple. Ahmet really taught me how to be a diplomat when it came to certain situations with artist and managers and it was an extremely wonderful relationship. It was almost like a father son relationship."[76]

In 1969 Greenberg was appointed as General Manager of the label. In the early 1970s, with Wexler now spending most of his time in Miami, Greenberg began working closely with Ertegun, who recognised his ability and promoted him rapidly. By 1972 Greenberg held the dual titles of Vice President of Radio Promotion, and Vice President of Artists and Repertoire, and in 1974 Ertegun - by now Chairman of the company - appointed him President of Atlantic Records, making Greenberg, at just 32, the youngest-ever president of a major recording company.

Atlantic's success with rock acts had begun with Cream, and it was another British hard rock group who became its next major discovery. In late October 1968 music manager Peter Grant flew to New York with tapes of the debut album by a new British rock band called Led Zeppelin. Ertegun and Wexler already knew of the group's leader, Jimmy Page, through his tenure in The Yardbirds, and their favourable opinion was reinforced by Dusty Springfield, who strongly recommended that Atlantic should sign the new band. When Grant met with Ertegun and Wexler, a deal was quickly drawn up. On November 23 Atlantic issued a press release announcing the signing of Led Zeppelin to an exclusive five-year contract, one of the "most substantial" in the label's history; although not disclosed at the time, this included an advance of $US200,000.[77] Zeppelin recorded directly for Atlantic Records from 1968 to 1973 and after that contract expired, they founded their own "vanity" label, Swan Song Records and signed a distribution deal with Atlantic (after being turned down by other labels). The arrival of Led Zeppelin proved timely for Atlantic's future as a rock label - one month after their signing, Atlantic's flagship rock act Cream played their farewell concert at the Royal Albert Hall in London (supported, coincidentally, by another up-and-coming new band, Yes, who were themselves signed to Atlantic early the next year).

Atlantic's next major breakthrough came with one of rock's first "supergroups", although the label almost lost what proved to be one of the most successful signings in its history. In 1969 Stephen Stills was still signed to Atlantic under the contract dating from his tenure in Buffalo Springfield. His agent David Geffen came to Jerry Wexler to ask for Stills to be released from his Atlantic contract, because Geffen wanted Stills' new group to sign with Columbia Records. Wexler lost his temper and threw Geffen out of his office, but fortunately Geffen called Ahmet Ertegun the next day, and Ertegun persuaded Geffen to convince Clive Davis at Columbia Records to let Atlantic sign the new group, Crosby Stills & Nash.[78]

The trio was formed following a chance meeting between members of three leading 1960s pop groups - Stephen Stills, David Crosby of The Byrds and Graham Nash of The Hollies). Stills and Crosby had been friends since the early 1960s; Nash had first met Crosby in the mid-1960s when The Byrds toured the UK, and he renewed the friendship when The Hollies toured the US in mid-1968. By this time creative tensions within The Hollies were coming to a head, and Nash had already decided to leave the group. Fate intervened during the Hollies US tour, when Nash reunited with Crosby and met Stephen Stills (ex-Buffalo Springfield) at a party at the Los Angeles home of Cass Elliott in July 1968. After Crosby and Stills sang Stills' new composition "You Don't Have To Cry" that evening, Nash asked them to repeat it, and chimed in with an impromptu third harmony part. The trio's unique vocal chemistry was instantly apparent, so when Nash quit the Hollies in August 1968 and relocated to Los Angeles, the three immediately formed a trio, Crosby, Stills & Nash. After surprisingly failing their audition for Apple Records, thanks to Ertegun's intervention and intense negotiations with David Geffen, who represented Crosby and Nash, as well as Stills,[79] they ultimately signed with Atlantic, who gave them virtually complete freedom to record their first album. The signing was complicated by the fact that Nash was still under contract to Epic Records (The Hollies' US distributor), but Ertegun used his diplomatic prowess to overcome this by arranging a 'swap' – he released former Buffalo Springfield member Richie Furay from his Atlantic contract, allowing Furay's new group Poco to sign to Epic, and in exchange Columbia Records (the parent company of Epic) allowed Nash to sign to Atlantic. In the event, Ertegun and Atlantic were the clear winners - Poco achieved moderate success for Epic, but Crosby, Stills & Nash's self-titled debut album (released in May 1969) became a huge and enduring hit - it reached #6 on the Billboard album chart, spawned two US Top 40 singles, became a multi-platinum seller and eventually earned a place in the Rolling Stone list of The 500 Greatest Albums of All Time &mdash.

With their commercial breakthrough, CSN needed to recruit extra members to allow them to tour, since Stephen Stills had played almost all the instruments on their first album. They first added session player Dallas Taylor as their drummer; Stills' former Buffalo Springfield bandmate Bruce Palmer was initially hired as the bassist, but he was subsequently removed and replaced by Motown bassist Greg Reeves before the group recorded again. It was Ertegun who suggested the final member of the quintet, another of Stills' former Buffalo Springfield bandmates, Neil Young (who was already signed to Atlantic's sister label Reprise Records as a solo artist). The new lineup embarked on a short US tour, and their profile was immeasurably enhanced by only their second live performance, which took place at the epochal Woodstock Festival.

The recording of the CSNY album displayed a previously unheard-of level of indulgence by their record company, with Stills estimating that they spent some 800 hours in the studio, although this investment was quickly recouped when Déjà Vu was released in March 1970 - it became a huge hit, reaching #1 on the Billboard album chart (also reaching #1 in Australia and #5 in the UK) and generating three hit singles. It was soon followed by another Top 20 single, the non-album track "Ohio". In contrast to the laboriously-recorded album tracks, Young wrote the song immediately after seeing photos of the infamous Kent State shootings in Life magazine; the group went to the studio later that day and the track was cut, live, in just a few takes; it was rush-released in June 1970, hitting the shops only weeks after the event it protested.

Fuelled by their huge success as a group, all four main members of CSNY released their own solo albums over the next few months: Stills, Crosby and Nash released their debut solo albums on Atlantic during 1970-71, each featuring stellar supporting casts of backing musicians alongside the other members of CSNY. (Young's After The Goldrush came out on Atlantic's sister label Reprise Records, to which Young had already signed as a solo artist). Stills' album was a major hit, reaching #3 (with the single "Love The One You're With" making #14 on the US singles chart); Crosby's If I Could Only Remember My Name reached #14 (and has remained in print ever since) and Nash's Songs for Beginners reached #15, with the single "Chicago", reaching #35. In the meantime, Atlantic had released CSNY's second album, the 2LP live set 4 Way Street, which also went to #1 and earned a gold record award, but by the time it had reached the stores the group had already split. Despite this, Atlantic enjoyed continued success with the various members - Stills' next two LPs both made the US Top 10, as did Crosby and Nash's 1972 duo album. The group briefly reformed in 1974 for a hugely successful stadium tour, and although plans for a new album were scuppered by the band's legendary infighting, the hastily compiled anthology So Far still managed to top the US album chart.

Concurrently, Led Zeppelin were fast becoming one of the biggest acts in the world, earning millions for Atlantic. Despite some early negative critical reactions, their 1969 debut album took off rapidly, going Top 10 in the US and the UK, where it remained on the charts for 73 weeks and 79 weeks respectively and also charting as a Top 10 album in Spain and Australia. It has remained a consistently huge seller ever since, earning 8 platinum awards (8 million copies) for sales in the USA alone. Zeppelin's second LP was even more successful, going to #1 in the USA, Canada, Britain, Australia and Spain and earning a Grammy nomination for Best Album. It too became a massive and enduring success, selling over 12 million copies in the USA.

Hot on the heels of the huge success of CSNY and Led Zeppelin, British band Yes rapidly established themselves as one of the leading groups in the burgeoning progressive rock genre, and their success also played a significant part in establishing the primacy of the long-playing album as the major sales format for rock music in the 1970s. After several lineup changes during 1969-70, the band settled into its "classic" incarnation, with guitarist Steve Howe and keyboard player Rick Wakeman, who both joined during 1971. Although the extended length of much of their material made it somewhat difficult to promote the band with single releases, their live prowess gained them an avid following and their albums were hugely successful - their third LP The Yes Album (1971), which featured the debut of new guitarist Steve Howe, became their first big hit, reaching #4 in the UK and just scraping onto the chart in the US at #40. From this point, and notwithstanding the impact of the punk/new wave movement in the late 1970s, the band enjoyed an extraordinary run of success—beginning with their fourth album Fragile, each of the eleven albums they released between 1971 and 1991 (including the lavishly packaged live triple-album Yessongs) made the Top 20 in the USA and the UK, and the double-LP Tales of Topographic Oceans (1973) and Going For The One (1977) both reached #1 in the UK.

In the mid 1970s, Atlantic scored with another British band Bad Company, a new group put together by former Free members Paul Rogers and Simon Kirke. Managed by Led Zeppelin's Peter Grant, and signed to Zeppelin's Swan Song label (which was distributed by Atlantic), Bad Company's first three albums were hugely successful, and the group also had five US Top 40 singles between 1974 and 1976. Their 1974 self-titled debut album went to #1 on the Billboard album chart, earning a Platinum award for sales of over 1 million copies, and they also scored two Top 20 singles with "Can't Get Enough" (#5) and "Movin' On" (#19). Their second album Straight Shooter (1975), reached #3 on the Billboard album chart and spawned another two hits, "Good Lovin' Gone Bad" (#No. 36) and "Feel Like Makin' Love"(#10). Their next LP Run With the Pack (1976) earned the group a third Platinum-certified album, reaching #5 on the Billboard chart, and their cover of the Atlantic classic "Young Blood" - the breakthrough hit for The Coasters back in 1957 - peaked at No. 20 on the US charts. After this run of heady success, however, their fourth album Burnin' Sky (1977) sold poorly compared to the previous three (reaching only #15 on the album chart), and the title-track single failed to reach the Top 40, only getting to #78. The band's fortunes revived with their next album, Desolation Angels (1979), which reached No. 3 on the Billboard charts and again had two charting singles: "Rock 'n' Roll Fantasy" (#13) and "Gone Gone Gone" (#56). Unfortunately, this renewed success was short-lived; manager Peter Grant lost interest in the music scene after the untimely death of his close friend, Led Zeppelin drummer John Bonham, in September 1980, and as a result both Led Zeppelin and Bad Company subsequently split up.

Much of Atlantic's renewed success as a rock label in the late 1970s can be attributed to the efforts of renowned A&R manager John Kalodner. In 1974 the former photographer, record store manager and music critic joined Atlantic's New York publicity department. In 1975 Kalodner moved to the A&R department, rose rapidly through the ranks, and in 1976 he was promoted to become Atlantic's first West Coast director of A&R. Over the next four years he was instrumental in signing a string of major acts including Foreigner, AC/DC, Peter Gabriel and Phil Collins. Kalodner built his reputation by signing acts that other labels had turned down, and perhaps the most significant example of his achievements in this area was his championing of Anglo-American band Foreigner.

The group was the brainchild of expatriate British musicians Mick Jones (ex Spooky Tooth) and Ian McDonald, one of the founding members of King Crimson. The demo tapes of the songs that eventually became their debut album (including the song "Feels Like The First Time") were famously rejected by almost every major label, including Atlantic - although their tenacious manager Bud Prager later revealed that, in retaliation for a previous bad deal, he deliberately didn't approach CBS ("They had screwed me out of a lot of money, so I figured I would screw them out of Foreigner. The band was never even offered to them.")[80] Prager persisted with Atlantic, even though their A&R department and label president Jerry Greenberg repeatedly rejected Foreigner; it was Kalodner's dogged belief in the group (and a live audition) that finally convinced Greenberg to allow Kalodner to sign them and take them on as his personal project. Even then, Kalodner was turned down by twenty-six producers before he found someone willing to take on the project. Despite all the resistance, Kalodner's belief in Foreigner was totally vindicated by the group's massive success - their 1976 debut single "Feels LIke The First Time" reached #4 on the Billboard singles chart, their self-titled debut album sold more than 4 million copies, and the subsequent singles from the album kept the group in the US charts continuously for more than a year. In the years that followed, Foreigner became one of Atlantic's biggest successes, and one of the biggest-selling groups in history, scoring a string of international hits and selling more than 80 million albums worldwide, including 37.5 million albums in the USA alone.

In 1978 Atlantic finally broke the leading UK progressive group Genesis as a major act in the USA. Ahmet Ertegun had first seen them perform in the Midwest on one of their early American tours, and it was on this occasion that he also became an ardent fan of their drummer/vocalist, Phil Collins. Jerry Greenberg signed the group to Atlantic in the USA in 1973 on Ertegun's advice, but although they were very successful in Europe, Genesis remained at best a "cult" act in America for most of the Seventies. In the meantime, original lead singer Peter Gabriel had left the group in 1975, followed in 1977 by lead guitarist Steve Hackett, reducing the group to a three-piece. Ertegun was directly involved in the recording of the band's 1978 album ...And Then There Were Three, personally remixing the album's projected first single "Follow You, Follow Me". Although the group didn't use this version, it guided them in their subsequent production. Collins later commented, "We didn't use his version, but we knew what he was getting at. He saw something more in there that wasn't coming out before."[81] The released version of "Follow You, Follow Me" gave Genesis their first hit single in the USA, the album became their first American gold record, and the experience resulted in Ertegun and Collins becoming close friends.

By 1979 Genesis drummer/singer Phil Collins was considering branching out into a solo career. Reacting to the acrimonious breakup of his first marriage, he had begun writing and recording new songs at home, which were considerably different from the material he had been recording with Genesis. Although many in the industry reportedly discouraged him from going solo,[82] Collins was strongly supported by Ertegun, who encouraged him to record an album after hearing the R&B-flavoured demo tapes Collins had recorded in his garage. Ertegun also insisted on changes to the song that became Collins' debut single. After hearing the song's sparsely-arranged opening section, Ertegun said: "Where's the backbeat, man? The kids won't know where it is - you've got to put extra drums on it." Collins replied "The drums come later," to which Ertegun retorted "By that time the kids will have switched over to another radio station." Acceding to Ertegun's demand, Collins took the unusual step of overdubbing extra drums on the finished master tape, and he later commented, "He (Ertegun) was quite right."[83]

Although his close friendship with Ertegun helped Collins launch his solo career, the fact that he eventually signed to Atlantic in the USA was apparently as much by luck as by design. By early 1980, when Collins was recording his solo album, the record industry was suffering greatly from the impact of the worldwide economic recession, and many labels were beginning to cull their rosters and drop acts that weren't providing major returns. At this same time, Genesis' contract with Atlantic was up for renewal, and Collins was yet to sign as a solo artist. As part of the negotiations, Collins and his bandmates wanted their own 'vanity' label, Duke Records, but according to Kalodner, and despite of Ertegun's personal interest, the group's demands, and their relatively modest performance in the USA made Atlantic executives ambivalent about the deal.[84] Kalodner was overseeing the recording of Collins' solo album while Atlantic were vacillating about signing the band and Collins, but it was at this point that Kalodner was abruptly dismissed from Atlantic, although he was almost immediately recruited to head the A&R division at the newly formed Geffen Records. Angered by his unceremonious ejection from Atlantic, he alerted Geffen to Collins' availability, but to his chagrin, neither Geffen nor any other US label showed interest; He then alerted Virgin Records boss Richard Branson, who immediately contacted Collins' manager Tony Stratton Smith and signed Collins to Virgin in the UK as a solo act.[84]

Ultimately, Atlantic resigned Genesis and signed up Collins to a solo contract, and when it was released later that year, Collins' debut solo single became a huge hit, Aided by its music video, which was given heavy exposure on the newly launched MTV cable music TV channel, "In The Air Tonight", topped the charts in many countries including the USA, and his album Face Value sold more than five million copies. Collins went on to enjoy colossal solo success in parallel with his continuing career in Genesis, and he is now recognised as one of the most successful recording artists in history, with solo sales of more than 150 million albums. Although much maligned by rock critics and the tabloid press, Collins has earned the remarkable distinction of being one of only three performers (alongside Paul McCartney and Michael Jackson) who have sold over 100 million albums worldwide both as solo artists and (separately) as principal members of a band.

Kalodner had also signed Collins' former bandmate Peter Gabriel, and Atlantic released the first two of Gabriel's four self-titled solo albums in America. The first album (also known as "Car") was moderately successful, spawning the UK hit single "Solsbury Hill" but his second album (a.k.a. "Scratch") did not fare as well, although it did reach #10 on the UK album chart. Kalodner had heard some early recordings Gabriel was making for his next album, and reportedly loved the two very commercial tracks he was played, but when the final master was delivered, the two 'commercial' tracks were missing, and Kalodner was incensed by what he felt was a very 'eccentric' and uncommercial album. In one of the rare missteps in his career, Kalodner advised Ertegun and Greenberg that they should reject the album and that they should consider dropping Gabriel from the label. Surprisingly, his advice was accepted and on Ertegun's personal approval, Gabriel's contract with Atlantic was terminated. Gabriel's third solo album (a.k.a. "Melt") was eventually released on the Mercury imprint and became a significant success, with the single "Games Without Frontiers" reaching the Top 10 in the UK and #48 on the Billboard Hot 100 in the USA.

Although Ertegun subsequently disputed Kalodner's account of the Genesis/Collins contract saga, he agreed that the loss of Gabriel was a big mistake, and his regret about his handling of the matter was only compounded by Gabriel's subsequent success with Geffen. Much of this was due to Kalodner, who later admitted that, as soon as Gabriel was dropped from Atlantic, he realised he had made a mistake. In order to make amends to Gabriel, he alerted both CBS and Geffen to the fact that Gabriel was available, and after a bidding war, Gabriel signed with Geffen.[85] They released his fourth solo album (a.k.a. "Security") in 1984 to wide acclaim, and Gabriel scored a minor US hit with the single "Shock The Monkey". Atlantic's regret was undoubtedly heightened when Gabriel achieved huge international success with his fifth album So (1986), which reached #1 in the UK and #2 in the USA and sold more than 5 million copies in the USA. The irony was further compounded by the fact that Gabriel scored a US #1 hit with the R&B-influenced single "Sledgehammer", which featured the legendary Memphis Horns, and which Gabriel later described as "my chance to sing like Otis Redding."

Atlantic (and the world) suffered a catastrophic loss in February 1978 when a fire destroyed most of its tape archive, which had been stored in a non-air-conditioned warehouse in Long Branch, New Jersey. Although master tapes of the material in Atlantic's released back catalog fortunately survived due to being stored in New York, the fire destroyed or damaged an estimated 5000-6000 reels of tape, including virtually all of the company's unreleased master tapes, alternate takes, rehearsal tapes and session multi-tracks recorded between 1948 and 1969. Atlantic was one of the first labels to record in stereo; many of the tapes that were lost were stereo 'alternates' recorded in the late 1940s and 1950s (which Atlantic routinely taped simultaneously with the mono versions until the 1960s) as well as almost all of the 8-track multitrack masters recorded by Tom Dowd in the 1950s and 1960s. According to Billboard journalist Bill Holland, news of the fire was kept quiet, and one Atlantic staffer who spoke to Holland reported that he did not find out about it until a year later. Fortunately, reissue producers and archivists subsequently located some tapes that were at first presumed 'lost', but which had survived because they had evidently been removed from the New Jersey archive years earlier and not returned. During the compilation of the Rhino-Atlantic John Coltrane boxed set, producer Joel Dorn located supposedly destroyed outtakes from Coltrane's seminal 1959 album Giant Steps, plus other treasures including Bobby Darin's original Atco demo of "Dream Lover" (with Fred Neil playing guitar). Atlantic archivists have since rediscovered other 'lost' material including unreleased masters, alternate takes and rehearsal tapes by Ray Charles, Van "Piano Man" Walls, Ornette Coleman, Lennie Tristano and Lee Konitz.[86]

In 2006, the label denied "Weird Al" Yankovic permission to release "You're Pitiful", a parody of James Blunt's "You're Beautiful", despite Blunt's own approval of the song. Atlantic said that it was too early in Blunt's career, and that they did not want Blunt to become a one-hit wonder.[88] Although Yankovic could have legally gone ahead with the parody anyway, his record label, Volcano Entertainment, thought that it was best not to "go to war" with Atlantic.[89] The parody was released onto the Internet as a free download. Later he recorded two more parodies, "White & Nerdy", and "Do I Creep You Out", to replace "You're Pitiful". Yankovic, afterward, began wearing T-shirts reading "Atlantic Records sucks" while performing live. In addition, the music video for "White & Nerdy" depicts Yankovic vandalizing the Wikipedia article for Atlantic Records, replacing the whole page with "YOU SUCK!" in excessively large type (which spawned copycat vandalism of the article).[90]

Warner Communications merged with Time Inc. (owners of the aforementioned HBO) in 1990, forming Time Warner. That same year, Jimmy Iovine founded Interscope Records, which Atlantic owned a 50% stake in. Interscope released notable gangsta rap titles — many in conjunction with Death Row Records. Pressure from activist groups opposed to gangsta rap, however, later led to parent company Time Warner's decision to sell Atlantic's stake in the label to MCA in 1995.[91]

Time Warner sold Warner Music Group to a group of investors for $2.6 billion in late 2003. The deal closed in early 2004, consolidating Elektra Records and Atlantic into one label operated in the eastern United States.[2]

In 2007, the label celebrated its 60th anniversary with the May 2 PBS broadcast of the American Masters documentary Atlantic Records: The House that Ahmet Built and the simultaneous Starbucks CD release of Atlantic 60th Anniversary: R&B Classics Chosen By Ahmet Ertegun.[93]